Musk’s SpaceX Is Worth $400 Billion, xAI Worth $200 Billion

Elon Musk can almost stop worrying about the value of Tesla’s (NASDAQ: TSLA | TSLA Price Prediction) stock. His net worth has started to be concentrated in two massive private companies. One is SpaceX, the largest rocket company in the world. The other is xAI, which is the odd combination of his social media business and his AI operations.

Because of faltering sales and a troubling personal image which has alienated some buyers, Tesla’s stock has fallen from an all time high of $436 in early December of last year to $315. The stock is still up 204% in the last few years while the S&P 500 is 96% higher. Many analysts believe the stock price cannot run back up to $400 or more until Musk proves that Tesla is the world’s clear leader in truly self-driving cars. Tesla has competition from Alphabet’s (NASDAQ: GOOG) Waymo and several Chinese auto manufacturers. In the meantime, Tesla’s vehicle unit sales have fallen for more than a year.

SpaceX has two reasons for a tremendous valuation: the $400 billion figure is based on a current round of financing. This figure is up from $350 billion in December. SpaceX remains the premier provider of rockets that sling people and satellites into space. He has also used his rockets to build a satellite based broadband network that will soon be able to be accessed from everywhere in the world. It has 7,600 of these small orbiting devices, on the way to what the company says will be over 30,000.

Musk owns 42% of SpaceX and 79% of the voting shares. On paper, that means his piece is worth $168 billion.

xAI is a merger Musk engineered between his social media company X (formerly Twitter) which he bought in April 2022 and his AI operation, xAI. He paid $44 billion for Twitter. However, advertisers started to pull away from using the platform and the value collapsed.

In the new merger, X was valued at $33 billion (the equity value less the debt). People questioned why struggling X had a valuation of nearly that. Because of his ownership stakes in the two companies, he was able to push the transaction through. Musk’s AI operation competes with OpenAI among others. (OpenAI is valued at $300 billion.)

According to the FT, Musk is about to close a round of financing that will value xAI as $80 billion. The paper also reports “Saudi Arabia’s sovereign wealth fund, PIF, is expected to play a large role in the deal.” The AI portion of the company produces the Grok chatbot which recently produced a number of antisemitic results That does not seem to have dented the new financing.

Musk owns 59% of the new AI plus social median company. That puts the value of his piece at $47 billion.

Musk’s investments in SpaceX and xAI are worth $215 billion when added together. (Bloomberg puts his entire net worth at $360 billion.)